All Forum Posts by: Joshua VanName

I am curious if anyone has any experience with DSCR loans in rural areas. From what I can find, these loans seem difficult to get in rural areas. Mostly due to small population size or lack of comps. I live about an hour from Plattsburgh NY which is the largest city near me. Population 20k. My town probably has 5k. I have a free and clear rental property with 2 small houses both less than 2 years old. Appraised for $180,000. Looking to cash out. Would be happy with 75% ltv.

I am a carpenter by trade and make about 60k on the W2. My DTI is too high to take out a conventional loan.

Quote from @Jessie Murillo:

Hi Bigger pockets.

This is my first post, so please forgive my ignorance.  I own a rental property (4 bedroom house)  and the Tenant is using the property as his business address for his construction business.  We told the property manager about this 6 months ago and  she addressed it with the Tenant.  I checked yesterday and the Tenant is still using the rental as the business address.  Can you please advise me on what to do next or what constructive steps I can take to resolve this.  I live in California and I'm trying to be very careful to do the appropriate thing.  I'm not very knowledgeable and would appreciate your input.  Thank  you so much in advance.

I run a small contracting business in addition to being a w2 carpenter.  I can promise you we meet our clients at their home or business and not the reverse.  There would be almost no need for a client to go to a contractor's home.  

No client has ever showed up at my employer's home either.  I would not give it much concern.

Quote from @Frank Greg:

@Bruce Woodruff:

Sounds like a personal problem. Owner doesn't have to explain why they are deciding to supply the materials. You know nothing about the project to be rambling about project success. Mistakes & Delays = Zero!

 He is absolutely correct.  Nothing but headaches.  You sir are the one rambling.

Quote from @Aubrey Ford:

I purchased a "mostly" cosmetic fixer upper to live in for the next 12-18 months. The entire house needs a makeover and a few fixes.

I am not handy in the least, nor does my W2 job allow me the time to do the work myself.

Is it better to work via an app like thumbtack and work it bit by bit, vendor by vendor. OR get a GC to handle all the different trade folk? I like the idea of dealing with just one person and having them manage all the trades. But is the value there given I have 18 months to do all the work? Keep in mind I will be living here, so each room they work on I have to vacate during the work.  

First off do not try to handyman this job.  It will take forever and look like someone with no hands did the work. It is bad enough living in a house under renovation, it gets even worse when you are doing all the work yourself, and worse yet if this is in addition to a 40 hr workweek.

What you describe is basically a sheetrock job with a few "fixes".  Aside from any electrical or plumbing, which you do not mention, a good sheetrock crew is all you need.  You do not need a general contractor to supervise.  Most quality GC's are already busy and none will want to go room by room.  Get a few bids.  Break the job into pieces and pay them after each is completed. For example, rock installation and repair is step 1.  Mudding, taping, sanding is step 2.  Prime and paint step 3.  Many sheetrock crews also paint or know someone they trust that do.

Don't give out large sums of cash prior to the work being done. Agree to pay for materials as they are brought to the job and invoiced.

I highly recommend you do not go piecemeal (room to room).  This is very inefficient especially in terms of rocking, mudding, taping, and painting.  Sheetrock guys always need another room to work on while mud/paint dries.  Going room by room leads to much of the time being spent packing and unpacking, prepping and cleaning up.

Finish a bedroom off so you have a clean dust free living space.  Leave the rest of the house as empty as possible so they can work free from obstructions. 

Quote from @Stephen Dispensa:

Jason,

I'm a broker and property manager here in Tampa. The unfortunate situation that many of my clients have faced prior to coming to me is that their smaller property manager was bought out by a larger corporation, and consequently their services were diminished. 

Regarding your maintenance issues with your units, as your agent your property manager is responsible for reporting all issues to you and following your directions regarding repairs. If they are not showing you the obedience that you are owed with them as your agent, they are in breach of contract whether written or implied. 

Another issue I've seen, which you should look into, is MANY property managers operating without being properly licensed by the state. Here in Florida, only a Licensed Real Estate Broker may serve as a property manager. Licensed Agents working for the Broker may also serve as property managers if the broker allows. You should definitely look into your PM's licensing and take up complaints with the appropriate state agency.

Lastly, I'm not sure why you would want to stick with a property manager that you are having this much difficulty with. Your life will always be much easier when you work with the right people.

 As I read this, he is a tenant trying to reach the property manager.  

I am very curious as to the square foot of the job and the amount of framing involved.  Did they have to demo prior to commencing work?

I work for a union contractor who specializes in custom homes. Very rare.  So, each employee gets $53 an hour in wages/benefits.  Half the crew are driving company vehicles and receiving bonuses on top.  I can't imagine many nonunion gc having a wages expense being much higher than ours even in Vero Beach.  Especially in terms of framing, sheetrock, or painting crews. 

We built the bosses sister a 3500 square foot home. 4 bedroom, 2 1/2 baths, cavernous kitchen/dining/living room with 25' cathedral ceiling, massive laundry room, massive entry, office, gym, multiple pantries and closets, 2 car garage with 2nd floor game room.   I would not call it an open floor plan by any means, we are talking about a lot of walls and ceilings.  I can tell you right now the cost for sheetrock, labor to install, mud and tape and sand to level 5, prime and 2 coats of paint (7 different colors throughout house), touchups were about the same as what you seem to have been charged.  That is including cost of labor and materials.  Granted this job was mostly done at cost with her being family.

Unless this was a very large job or there were some extenuating circumstances this cost seems very high.  Even when adding 10 - 20% profit margin.  I would want to see an itemized bill if I were you. I would go over that and fight to get some concessions.

Quote from @Michael Plaks:

Quote from @Alfredo Cardenas:

I think I know who the new CPA i will be..

What do you think about my other strategy...

I think it would be a terrific question to ask your new CPA  ;)

 I like this guys style

Quote from @Don Konipol:

@James Hamling
‘I have some positions around 40% annual, but here is the thing, I know EXACTLY what there doing, where the $'s going, what the risks are. I get a sense here that people don't really know what there actually investing into here’

NAIL ON HEAD

If you are an ACTIVE participant in an investment, you can SOMETIMES obtain high yield without high risk, that is, take advantage of a mismatch between risk and return

As a passive participant, there is NEVER a mismatch, unless it’s higher risk than the return warrants. Why? Because the sponsor of the investment is going to offer the deal most profitable for them. 

So, it APPEARS to me that what we have here is this

1. Investors who have absolutely NO CLUE as to what they invested in, no clue as to the STRUCTURE of the deal, and no clue as to the safety or risk of their investment. In other words “large company - big return” being the extent of their due diligence.  
2. A sponsor that took advantage of investors propensity to be mesmerized by high yield and look no further by issuing a note that allows them to UNILATERALLY convert the interest paying note to “equity”, which MAY pay out nothing EVER. I don’t know the sponsors intention, nor do I know the terms of the note. But, it would appear that conversion to a minority position in a private company is the same result as obtaining capital, never having to pay interest, dividends, or even pay it back.  

Here’s some suggestions for investors investing in non publicly traded securities

1. Read the PPM thoroughly. If you can’t, or don’t want to, hire an attorney to do so and inform you of the pertinent parts

2. NEVER invest more than 10% of your investment portfolio in any one deal; never invest more than 20% with any one sponsor. 

3. Understand that high returns mean high risk in any PASSIVE investment.  

4. Differentiate between different risks , economic risk, structure risk, incentive risk, etc.

5. Assume that anything detrimental to your interests that appears in the PPM will one day be used

But, it would appear that conversion to a minority position in a private company is the same result as obtaining capital, never having to pay interest, dividends, or even pay it back

I am amazed something like this is even legal, especially if this was the intent from the beginning.  So, the op basically now owns shares of a privately held company.  A company that, as you point out, is not required to pay interest, dividends, or buy back the shares.  

Not one to revive old threads but if you still need advice, I would go with a Potsdam toilet garden.  A gentleman was burned by Potsdam NY when he was trying rezone some land.  From how I understand it another landowner did not want to see the land rezoned because his lot was the alternate.  Rumor has it he had more friends in high places.  In response the "victim" threw up a bunch of toilets and the town sued him.  So, he hired a lawyer, bought some more land and started planting flowers in the toilets all over town. 

Potsdam is a college town with SUNY Potsdam and Clarkson University.  Clarkson plays the ivy leagues in hockey and elected officials were worried how that made the town look.  He won in court on 1st Amendment free speech grounds, and I estimate he has 100 or more toilets spread about the town. Many just across the street from the Clarkson entrance.  I admire his resolve. Best of luck to you.

Quote from @Andrew Syrios:

You don't need an attorney but do need a registered agent (there are several companies that act as registered agents for different LLCs). Overall it's a pretty straightforward and simple process. Here's a good rundown of how to do it: https://www.biggerpockets.com/blog/guide-starting-llc

 You need a registered agent, but you can also choose to be your own agent.